Market Update - Wow!
Market Update Hello Smart Option Sellers! Wow! Deep breath. It's been a long time coming for a move like that. If you sit in front of the screens all day like I do (I hope you don't), then you saw this move unfold in real-time. I just kept saying - wow, is it going to keep going? And it kept on going. High volatility - the one thing we as option sellers like to see, definitely came around yesterday. Look at this chart of the VIX. Talk about an explosion. We will certainly see big swings in both the stock markets and the VIX over the next few days. But one thing I know for sure, is that the VIX spike will get reversed quite quickly as the stock market finds its footing. It always does. So, where does that leave us with our positions? One thing many of you probably found out yesterday is that you got filled on a number of positions if you had your orders working "GTC". Previous positions in HACK and BIG traded through our sell price, so you should be filled. And our open order in Eli Lilly (LLY) was filled yesterday too. Here's what we did: Sold (sold-to-open) the LLY July 2018 $60 put options for an official sale price of $.25 per contract as an opening transaction (sold-to-open). Obviously, many of our positions are now trading at higher prices than what we sold them for, giving us temporary paper losses. But let's remember, all of our trades are on high quality stocks. Everything was hit yesterday no matter what sector they are in. It doesn't mean everyone is going out of business though. Froth needed to be taken out of the market, and this move certainly helped. Every single one of our put-sell strikes still remain below the stock's current price. That means we still have cushion against more of a fall. We may see elevated put option prices for a bit, but if the stocks turn around and move higher, those option prices will drop again very quickly. Be aware of your margin requirements. They may have gone up over night. Meaning, your broker will have to keep more of your free cash aside to potentially cover the future purchase of the stock. At this point, we'll continue to hold each positi